EuroChem Group AG produced 2.223 million mt in 2020 at its Usolskiy potash operation, south of Berezniki, Russia, with the project reaching its Phase One design capacity of 2.3 million mt/y, the group said in its financial results statement on Feb. 9.
It said a continued ramp-up is envisaged at Usolskiy to add at least 1 million mt/y to output capacity in Phase Two, reaching a potential total of 4 million mt/y over “the next few years.”
Work on shaft construction at EuroChem’s second potash project, VolgaKaliy Russia’s southern Volgograd region, continued in 2020.
“The application of state-of-the-art 3D seismic data and thin seam analysis programs to map the potash and salt layers considerably advanced our knowledge of the ore body and enabled the production of 37,500 mt of test product in 2020,” the group said.
EuroChem said this year it is aiming to provide for a more regular ore production level at VolgaKaliy to match the growing shaft capacity.
The group in September of last year approved the construction of EuroChem Northwest 2, a new 1.1 million mt/y ammonia and 1.4 million mt/y urea plant, on an adjacent site in Kingisepp, Russia, to the EuroChem Northwest ammonia plant.
The EuroChem Northwest ammonia plant, with 1 million mt/y capacity, started production on June 7, 2019 (GM June 7, 2019), and has enabled the group to become fully self-sufficient in ammonia feedstock.
EuroChem said the new Northwest-2 project will be financed by a long-term non-recourse syndicated project finance loan. The group in late December reported that Russian state development corporation VEB.RF, with four partnering banks, would provide a syndicated loan of up to RUB99 billion (approximately $1.34 billion at current exchange rates), excluding an optional tranche to be provided by VEB.RF to cover interest and any increase in the project budget (GM Dec. 31, 2020). EuroChem put the total project cost at about RUB124 billion (approximately $1.7 billion at current exchange rates), excluding VAT.
The group did not disclose the project timeline for the EuroChem Northwest-2 development, however.
EuroChem increased its capital expenditure by 23 percent to $1.2 billion in 2020 on the decision to proceed with the EuroChem Northwest 2 project. Maintenance capex amounted to 28 percent of total, with the rest allocated to key expansion projects: ECNW2, Usolskiy, and VolgaKaliy potash plants.